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Why Real Estate Prices are Skyrocketing in West Bengal?


Why Real Estate Prices are Skyrocketing in West Bengal?

Last updated: October 20 2008
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  • Why Real Estate Prices are Skyrocketing in West Bengal?

    KOLKATA, Oct. 18
    The Statesman

    Wondering why real estate prices are skyrocketing in the state? Blame it on the bureaucracy and red-tape, which ensures an inordinate delay in approving real estate projects and a subsequent price escalation.

    According to the Confederation of Real Estate Developer's of India (CREDAI), the apex body of organised real estate developers, West Bengal is the worst among all states in terms of providing clearances to residential and commercial projects which result in inordinate delays.

    “In other states it takes around 15 days to a month to start construction after planning is over. In West Bengal it can take anywhere between a year-and-half to two years for the same,” Mr Santosh Rungta, vice president (East) CREDAI said.

    This when states like Gujarat provide all necessary clearances and sanctions for a real estate project within 15 days. “Even in neighbouring Jharkhand the government ensures that construction at the site begins within three months after the plan is submitted,” Mr Rungta claimed.

    In West Bengal, the Urban Land Ceiling Act is the major cause of the delay. This apart, every department like Fire and Emergency Services, Land and Land Reforms, Environment and the civic bodies take their own sweet time to issue clearances to a project.

    “Even in the late 60s the Kolkata Municipal Corporation had a mechanism to ensure a real estate project is cleared within a month but the act was abolished later,” Mr Rungta said. None of the projects in the city had started before one and a half years after the plan was prepared and submitted for sanction, he claimed.

    With land becoming a major issue in the state, getting possession of a plot is a tough issue and takes anywhere between six to nine months. A residential project in Behala has not even started yet because the West Bengal Industrial Development Corporation, which had sold the land to a developer, has not handed over the plot even after nine months, the vice president said. “This is not an isolated case but a regular phenomenon.

    So a developer who has to pay an interest of around 15 per cent for the money invested adds it to his cost. This has resulted in an almost vertical (100 per cent) rise in real estate prices in the state,” Mr Rungta added.

    He said the trend could not be maintained over a long period and prices will soften in the future. To ensure parity in prices the organisation urged that the government should develop a system to ensure all necessary clearances are provided within a specified time frame. “Otherwise prices will keep rising, taking them out of the reach of common people. This rise will benefit none, neither the government nor the developer,” he observed.

    CREDAI is present across 17 states in the country with over 3,500 individual members, encompassing over 60 per cent of the organised real estate sector in the country.
  • #2


    Re : Why Real Estate Prices are Skyrocketing in West Bengal?

    I think it has fall again after Tata moving out
    Either land or AIR and FOOD. Choice is yours.


    Have any questions or thoughts about this?